How Big Data Can Drive Mobile Payments Adoption

How banks decide to use their customer data to make relevant coupon offers to consumers will determine their place in the mobile payments ecosystem.

It’s becoming a popular notion in the payments industry that the key to consumer adoption of mobile payments is providing targeted and timely coupon offers to customers that will entice them to pay with their phones. Many also believe that this puts banks in a strong position in the mobile payments ecosystem because of the data that banks have to help develop relevant offers.

A survey released recently by NGDATA and Clear2Pay found that 80% of bankers thought that banks make mobile wallets more enticing for customers by offering such targeted coupons. And three quarters of the respondents said that their banks would be interested in facilitating commerce between merchants and their customers through such offers.

But it’s the data behind those coupons that will determine how enticing the offers are and how successful the mobile payments initiatives that they support will be. Some mobile payments initiatives have realized this and are looking at new ways to leverage more consumer data to push adoption through coupon offers.

“The data around the payment is more important to us than moving off the card to a chip,” says Robert Zeigler, the CEO of Corduro, which offers a mobile payments app called PayMobile. “Data gives the merchant the ability to know [the consumer], and tune their relationship to [the consumer].”

Corduro has a specific interest in customers’ social network data. The company uses a social networking approach that allows merchants to set up an online social community where it can invite customers and offer them rewards and coupons. Community members can invite their social network connections to the merchant’s community, enlarging the community and pool of customers.

“We own the data [around the payment]… and we can tell the merchant about the social influence of the individual customer,” Zeigler explains. “We know how much you spend on groceries, but we also have the ability to see how much your network spends on groceries.”

This gives the merchant a way to find target new customers who share some of the same interests as their current customers, Zeigler claims. “Businesses want to know what I like, but I know that most of the people in my social network also like the same things that I like,” he reasons.

IT services provider Mahindra Satyam is taking a different tack on the challenge of using data to push relevant offers to consumers. All of the customer data that can be used today to make relevant offers is often divided up between many organizations, Sudeep Kanjilal, the global head of payments for Mahindra Satyam, points out. Telco providers, bank and card networks all have different data on the same customers, and combining all of that data across organizations could lead to more relevant offers than any one of those organizations could provide on their own, he says.

With that in mind Mahindra designed a platform called the Global Inter-Carrier Gateway for Context Aware Mobile Commerce that can combine data from different companies to produce offers for mobile consumers. The platform is being used in Singapore as part of a pilot, and the company plans to extend the platform to other parts of the world. “With the technology in place we are connecting with issuers, mobile network operators, payments processors, merchants and card networks,” Kanjilal reveals.

Mahindra uses its data centers to analyze all of the data to make timely and targeted offer to the consumer, and then destroys the data once the offer has been made, he adds.

“No one has all of the data and no one wants to share their data,” Kanjilal explains. “Analytics can figure out that when I go to San Francisco I usually go to a certain cafe. The telco knows I landed in San Francisco, and the bank knows what I usually get when I go to that cafe. That data combined can lead to a relevant offer.”

The data ecosystem to do that would take banks years to build, Kanjilal says, making the platform an attractive offer.

If consumer adoption of mobile payments depends heavily on customer data, then banks are going to have to figure out how they want to use their data to participate in the mobile payments space, and who - if anyone - they’re willing to share that data with.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio